Finance Minister Zdravko Maric said on Tuesday that a draft revised budget would be on the government's agenda on Thursday, and that the revision envisaged 1.6 billion kuna to be set aside for the healthcare sector.

“We are fine-tuning the revised budget according to our macro-economic projections, and the latest forecasts show that the country’s economic growth in 2021 will exceed 8%, which I find to be a very good result… we are going to reach the pre-pandemic GDP in less than two years,” Maric told the press after a business conference in Zagreb.

However, not so good news is that the expenditure side of the budget for this year is growing at a higher rate than the revenue side, the minister said.

The reasons why the expenditures are growing are the higher indexation of pensions in the second half of 2021 due to the inflation rate, higher-than-planned outlays for grants under the job-keeping scheme, and bigger outlays for the wage budget in the public sector.

However, the debts to drug wholesalers and years-long liabilities of the healthcare sector seem the most conspicuous item for the expenditure side.

Under the revised budget, 1.6 billion kuna will go to the healthcare system, and this year’s budget outlays for this sector will exceed nine billion kuna.

On 30 September, the debts to drug wholesalers came to 2.8 billion kuna, plus 400 million in liabilities to pharmacies.

Given the higher rise in expenditures than in revenues, the minister expects now a wider-than-planned budget gap. However, he declined to specify the deficit amount.

Public debt-to-GDP ratio projected to fall

Despite those trends, Croatia’s public debt-to GDP ratio in 2021 is projected to decline this year, Maric said adding that this was a clear message to the enterprise sector and to all in Croatia and to the international community.

This narrowing takes Croatia back on the course it had taken before the outbreak of the corona crisis, he explained.

(€1= HRK 7.52)